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Qorvo (QRVO) Rides on Solid Uptick of UWB-Based Devices

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Qorvo (QRVO - Free Report) recently announced that its wireless Ultra-Wideband (UWB) technology is witnessing rapid traction across device manufacturers on growing proliferation of proximity awareness applications.

UWB technology enables reliable location sensing on a real-time basis, powering the devices to measure distance with sharp accuracy of a few centimeters — in both indoor and outdoor setting.

Qorvo’s UWB technology embedded in contact tracing applications in wearable UWB devices, makes it ideal to aid employees return to workplace in a safe manner by ensuring social distancing measures.

In fact, Qorvo’s UWB technology has been utilized by notable device makers across North America, Europe, and the Asia-Pacific region, including Europe-based Ubudu and U.S.-based Redpoint.

Further, synergies from Decawave, Active-Semi and MEMS technology acquisitions have significantly expanded Qorvo’s capabilities and positions it well to benefit from rise in demand for proximity awareness, secure payments and secure access for smartphones, automotive and IoT.

The company specifically noted that acquisition of Decawave, has enabled more than 8 million UWB chipsets across 40 different markets.

Notably, Qorvo’s DWM1001C module low power solutions, "combines a UWB transceiver with a microcontroller and Bluetooth technology."

Growing clout of return-to-workplace applications that require proximity awareness, precise location and distance sensing in the post COVID-19 era, including indoor navigation and asset tracking, are anticipated to drive further adoption of Qorvo’s UWB technology.

Strength in Product Portfolio: A Key Catalyst

Qorvo is benefiting from increase in production ramp of 5G smartphones. Solid uptake of Bulk Acoustic Wave (BAW) filters, as economies started to reopen, is expected to drive the top line.

Specifically, momentum in 5G is expected to bolster the company’s RF revenues in 2020 and beyond.

Further, booming WiFi-6 cycle and increasing proliferation of IoT are expected to generate incremental revenues in the days ahead.

Notably, Qorvo’s cellular RF and WiFi solutions find application in a variety of mobile devices, including smartphones, notebook computers, wearables, tablets, and cellular-based applications.

Moreover, robust mobile growth in China (primarily backed by 5G) and expanding portfolio of 5G base solutions amid accelerated deployment of 5G bodes well. Besides growing momentum for Qorvo’s Gallium Nitride (GaN) technology-based solutions is a positive.

This is expected to instill investor optimism in the stock in the days ahead. Qorvo’s stock has gained 15.9% year to date, compared with industry’s rally of 12%.

Being a prominent supplier to Apple, seasonal iPhone upgrades hold promise for Qorvo. Also, improving iPhone sales despite coronavirus breakout remain a tailwind.

Positive Earnings Estimate Revision

Qorvo has an impressive earnings surprise history. The company beat estimates in each of the trailing four quarters, the average surprise being 20%.

Moreover, fiscal 2021 estimates were revised over the last 30 days, driving the Zacks Consensus Estimate upward by 7% to $7.06 per share.

Further, the company has a long-term expected EPS growth rate of 12.35%.

Robust adoption of the company’s solutions in defense (advanced radars and other electronic warfare products) and connectivity (Wi-Fi 6 and emerging IoT applications) is expected to bolster prospects.

Zacks Rank & Other Key Picks

Qorvo currently carries a Zacks Rank #2 (Buy).

Other top-ranked stocks in the broader technology sector are Square, Inc. (SQ - Free Report) , Zoom Video Communications (ZM - Free Report) and Jabil (JBL - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Square, Zoom Video and Jabil is currently pegged at 40.9%, 25% and 12%, respectively.

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